Johns Creek Man Charged In Paycheck Protection Program Fraud

JOHNS CREEK, GA — A Johns Creek man has been charged in connection to an over $4 million Paycheck Protection Program fraud scheme.

Darrell Thomas, 34, of Johns Creek, was charged with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, false statements to a financial institution and money laundering.

Thomas was one of five individuals charged in an indictment with fraudulently obtaining more than $4 million in Paycheck Protection Program loans and using those funds, in part, to purchase luxury vehicles. Authorities have seized a Range Rover worth approximately $125,000, jewelry, over $120,000 in cash, and over $3 million from 10 bank accounts at the time of arrest, according to the Department of Justice.

The others charged include Andre Lee Gaines, 66, of Dallas, Georgia; Kahlil Gibran Green Sr., 46, of Cleveland, Ohio; and Bern Benoit, 44, of Burbank, California, who were charged in an indictment filed in the Northern District of Georgia with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, false statements to a financial institution and money laundering. Additionally, Carla Jackson, 52, of Tucker, Georgia was charged with money laundering. Thomas, Gaines, and Jackson were arrested Thursday morning and appeared that afternoon before U.S. Magistrate Judge Russell G. Vineyard of the Northern District of Georgia.

The indictment alleges that Thomas, Gaines, Green, and Benoit submitted, or assisted in the submission of, PPP loan applications on behalf of five businesses – Bellator Phront Group Inc. (owned by Thomas), Gaines Reservation and Travel LLC (owned by Gaines), Impact Creations LLC (owned by Green), Transportation Management Services, Inc. (owned by Benoit), and Lee Operations LLC – seeking loans of approximately $800,000 for each company. Thomas, Gaines, Green, and Benoit caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ number of employees and payroll expenses, the Department of Justice said. The financial institutions approved and funded over $4 million in loans.

The indictment further alleges that shortly after receiving the PPP funds, Thomas, Gaines, Green, and Benoit transferred the money to secondary bank accounts, including an account controlled by Jackson. After Jackson received the PPP funds, she further distributed the funds. Additionally, Thomas purchased a 2018 Mercedes-Benz S-Class S65AMG and a 2018 Land Rover Range Rover. In the days and weeks following the disbursement of PPP funds, the indictment alleges that Thomas, Gaines, Green, and Benoit did not make payroll payments as they claimed they would on their loan applications, the Department of Justice said.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.